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Republic Services Inc (NYSE:RSG)
Beneish M-Score
-2.69 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Republic Services Inc has a M-score of -2.69 suggests that the company is not a manipulator.

RSG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.03   Max: -0.5
Current: -2.69

-3.03
-0.5

During the past 13 years, the highest Beneish M-Score of Republic Services Inc was -0.50. The lowest was -3.03. And the median was -2.72.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Republic Services Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0011+0.528 * 0.9706+0.404 * 1.002+0.892 * 1.027+0.115 * 0.977
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9902+4.679 * -0.0448-0.327 * 1.0171
=-2.69

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $1,017 Mil.
Revenue was 2409.3 + 2350.7 + 2248.6 + 2290.2 = $9,299 Mil.
Gross Profit was 932.6 + 910 + 867.2 + 886.5 = $3,596 Mil.
Total Current Assets was $1,302 Mil.
Total Assets was $20,662 Mil.
Property, Plant and Equipment(Net PPE) was $7,616 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,070 Mil.
Selling, General & Admin. Expense(SGA) was $989 Mil.
Total Current Liabilities was $1,818 Mil.
Long-Term Debt was $7,740 Mil.
Net Income was 85.6 + 180.8 + 156.7 + 172.2 = $595 Mil.
Non Operating Income was -194.9 + 1.6 + -0.7 + 0.7 = $-193 Mil.
Cash Flow from Operations was 515.3 + 412.8 + 431.5 + 355.2 = $1,715 Mil.
Accounts Receivable was $989 Mil.
Revenue was 2344 + 2311.4 + 2169.4 + 2229.1 = $9,054 Mil.
Gross Profit was 953.8 + 891 + 865.1 + 688.7 = $3,399 Mil.
Total Current Assets was $1,444 Mil.
Total Assets was $20,792 Mil.
Property, Plant and Equipment(Net PPE) was $7,553 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,033 Mil.
Selling, General & Admin. Expense(SGA) was $973 Mil.
Total Current Liabilities was $1,901 Mil.
Long-Term Debt was $7,556 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1016.7 / 9298.8) / (988.8 / 9053.9)
=0.10933669 / 0.1092126
=1.0011

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(3398.6 / 9053.9) / (3596.3 / 9298.8)
=0.37537415 / 0.38674883
=0.9706

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1301.6 + 7616) / 20661.7) / (1 - (1444.3 + 7553.2) / 20791.8)
=0.5683995 / 0.56725728
=1.002

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=9298.8 / 9053.9
=1.027

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(1033 / (1033 + 7553.2)) / (1069.5 / (1069.5 + 7616))
=0.12030933 / 0.12313626
=0.977

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(989.3 / 9298.8) / (972.8 / 9053.9)
=0.10639007 / 0.10744541
=0.9902

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((7739.6 + 1817.9) / 20661.7) / ((7555.6 + 1900.5) / 20791.8)
=0.46257084 / 0.45479949
=1.0171

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(595.3 - -193.3 - 1714.8) / 20661.7
=-0.0448

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Republic Services Inc has a M-score of -2.69 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Republic Services Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.97870.98122.73280.41120.96910.98581.02241.02690.99880.9995
GMI 0.99151.01141.07230.84120.99261.01491.05941.0141.05330.9098
AQI 0.98491.00071.40730.99890.99540.99340.99510.98460.99690.9967
SGI 1.07221.03441.16022.22490.98871.01060.99091.03681.04591.0354
DEPI 0.96770.97282.47750.43210.96211.00521.01020.99060.98790.9901
SGAI 1.01480.96281.19440.91030.98570.95191.04750.96121.0291.0333
LVGI 1.0311.01330.9980.93640.95631.02370.99230.98041.01071.032
TATA -0.0532-0.0862-0.0219-0.0394-0.0397-0.0497-0.0425-0.0481-0.0489-0.0453
M-score -2.71-2.86-0.51-2.23-2.70-2.71-2.64-2.63-2.65-2.73

Republic Services Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.01141.00360.99871.01760.9970.99650.99960.97230.99361.0011
GMI 0.950.96791.05321.01081.04181.01750.90980.940.94150.9706
AQI 0.9980.99090.99690.99040.98370.98790.99670.99760.9981.002
SGI 1.05231.04961.04591.04711.04231.03881.03541.03361.02851.027
DEPI 0.970.97780.98791.00511.00531.00450.99010.97320.97520.977
SGAI 0.93260.93951.0291.04731.07451.07011.03331.01511.01290.9902
LVGI 0.9930.98661.01071.03061.02641.03951.0321.00851.01391.0171
TATA -0.0398-0.039-0.0489-0.0506-0.0538-0.0541-0.0453-0.0429-0.0436-0.0448
M-score -2.63-2.62-2.65-2.67-2.70-2.72-2.73-2.72-2.71-2.69
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